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Gross Profit Margins

Volume 974: debated on Monday 26 November 1979

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asked the Chancellor of the Exchequer if he will make a statement on the recent admission by the Board of Inland Revenue that it may have misled people with its past statements on the use of expected gross profit margin tables in the selection of businesses for in-depth investigation.

I assume that my hon. Friend has in mind the reference to the use made of gross profit margins by inspectors of taxes in technical release 358 issued in September 1979 by the Consultative Committee of Accountancy Bodies after consultation with the Inland Revenue. A copy has been placed in the Library. It amplifies a reference to the use of gross profit margins made in the committee's technical release 309 of June 1978 which did not make the position sufficiently clear. I do not think I can usefully add to what is said in the later release.